Autumn Statement and Spending Review: key announcements

It was an eventful Autumn Statement with the Conservatives making a number of U-turns; rolling back plans to make cuts to tax credits and a promise to freeze the police budget.

The Shadow Chancellor, John McDonnell, threw a copy of Chairman Mao’s little red book at George Osbourne over the Chancellors plan to sell state assets to China. The incident has been a splash on social media.

The Autumn Statement is where the Chancellor outlines his spending priorities for the future and what government services or departments will have to accommodate budget cuts. There was little in the Statement specific to the marketing sector but there were a number of measures that will effect businesses and they are outlined below:

Business

Department for Business, Innovation and Skills budget reduced by 17 per cent – far less than originally thought.

Government set aside the £12bn promised for the Local Growth Fund.

Creation of 26 new or extended Enterprise Zones, including 15 zones in towns and rural areas from Carlisle to Dorset to Ipswich.

Business rates – local authorities and cities can cut rates and retain income.

No growth without successful entrepreneurs – small business rate relief scheme for another year.

Protect the cash support we give through Innovate UK - £165m of new loans to companies instead of grants.

2017 - 30 hours of free childcare available – but only for households that work more than 16 hours and earning less than £100,000.

The housing budget will be increased to £2bn per year with the Government delivering 400,000 affordable homes by the end of the decade.

Infrastructure

Doubling investment in nuclear research.

Shale wealth fund.

Support for low carbon and renewables will double.

No environmental tariffs for steal and energy intensive industries.

General

We will spend £12bn more on capital investments.

Tax credit plans shelved - Tax credits are being phased out anyway as we introduce universal credit.

Apprenticeships

Increase the funding per place for apprenticeships – Business body to set the standard for apprenticeships – apprenticeship levy from April 2017 will be set at 0.5 per cent of an employer’s pay bill.

£15,000 allowance to offset against the levy - 98 per cent of all employers - and all businesses with pay bills of less than £3m will pay no levy at all.

Summary

The Chancellors speech positioned the Conservatives as the only party that could be trusted on the economy, a now familiar stance for the public.

George Osbourne said, “We were elected as a one nation government. Today we deliver the spending review of a one-nation government: the guardians of economic security, the protectors of national security: the builders of a better future.”

Whereas, Labour sought to talk give the statistics a human face and spoke about the suffering of many families that Labour say are not sharing in the UK’s growing economy.

The Office of Budget Responsibility (OBR) predict that the public finances £27 billion better off than they were in July. The improvement is due to a combination of better tax receipts and lower interest payments on debt, Chancellor George Osborne said in his Autumn Statement.